Malaysia and Philippines Strengthen Trade Ties with Memorandum of Understanding

Strategic Insights -

The Philippines and Malaysia are strengthening their trade ties with the signing of a memorandum of understanding (MOU) between the Philippine Guarantee Corp. (PHILGUARANTEE) and the Malaysian Chamber of Commerce and Industries Philippines Inc. (MCCI). This MOU aims to increase bilateral trade between the two countries, particularly in the export sector, housing and real estate, infrastructure, and financial and renewable energy sectors. Malaysian companies can now access local financing through PHILGUARANTEE, reducing their investment risks.

Key Takeaways:

  • The MOU signing lays the groundwork for more small and medium Malaysian businesses to do business in the Philippines, focusing on export, housing and real estate, infrastructure, and financial and renewable energy sectors.
  • PHILGUARANTEE, a government-owned corporation, will provide credit guarantees to businesses, enabling Malaysian companies to access local financing and reduce investment risks.
  • Malaysian companies like Berjaya Corp. BHD, Maybank, CIMB, and BDO Bank have already invested in the Philippines, with a total investment of over P10 billion.
  • Berjaya Philippines Inc. CEO Tan Eng Hwa mentioned that the Philippines has a huge population, favorable economic condition, and friendly people, making it an attractive destination for investors.
  • Malaysia's major exports to the Philippines include electrical and electronic products, petroleum, and palm-oil and palm-oil based products.
  • The Philippines' trade with Malaysia involves semiconductors, electrical and electronic products, agricultural and machinery products.
  • Ambassador Melvin Castelino emphasized the importance of empowering MSMEs, investments, and building a resilient, rules-based financial ecosystem.
  • The Malaysian envoy also highlighted the growth area of the halal food industry and tourism, where both countries have a strong common interest due to their Muslim communities.

Statistics:

  • As of May, total trade between the Philippines and Malaysia stood at $3.46 billion, with a 3.9 percent growth.
  • Malaysia's exports to the Philippines were $2.53 billion, while its imports from the Philippines were around $930 million.
  • Malaysia's major exports to the Philippines include electrical and electronic products (24.3%), petroleum (14.5%), and palm-oil and palm-oil based products (12.5%).
  • The Philippines' trade with Malaysia involves semiconductors ($574 million), electrical and electronic products ($495 million), agricultural and machinery products ($428 million).

Sources:

  • Philippine Guarantee Corp. (PHILGUARANTEE)
  • Malaysian Chamber of Commerce and Industries Philippines Inc. (MCCI)
  • Malaysia External Trade Development Corp. (MATRADE)
  • Department of Tourism
  • Ambassador Melvin Castelino
  • Berjaya Philippines Inc. CEO Tan Eng Hwa